Oldest US exchange looks to energy futures

Merchants Exchange, the oldest commodity exchange in the US, plans to offer energy futures contracts for the first time. The move follows an increase in demand for cleared contracts following the bankruptcy of Enron, although Merchants Exchange said it had planned the energy futures contracts before the Houston-based energy major declared bankruptcy on December 2.

The six futures contracts will cover West Texas Intermediate light, sweet crude and Brent crude - the world’s two benchmark crude contracts - plus heating oil, European gas oil, unleaded gasoline and natural gas. They build on the exchange’s only existing futures contract, barge freight futures, which began trading in December 2000. All futures contracts are traded electronically using the data clearing system of Virginia-based software company Savvis.

Merchants Exchange, which is based in Chicago, said it is the only electronic, demutualised, independent exchange in the US. It was founded in St Louis in 1836 and, before the rise of the Chicago Board of Trade, was the country’s leading commodities exchange. It received designation as a futures market from the Commodity Futures Trading Commission in July 2000.

The largest US energy exchanges in terms of volume are the New York Mercantile Exchange and Atlanta-based Intercontinental Exchange. Both have picked up liquidity following the demise of EnronOnline.